Brands Can Build Relationships with Younger, High-Income Consumers via Ad-Supported Over-The-Top Video, According to IAB Research

LOS ANGELES — The Interactive Advertising Bureau (IAB), at NewFronts West, released “Ad Receptivity and the Ad-Supported OTT Video Viewer,” an in-depth study that reveals an opportunity for brands to connect directly with key consumer segments through ad-supported video (ASV) delivered over-the-top (OTT). Results show that the largest audience segment of ASV OTT viewers is 18-34-year-old adults and they are likely to be higher income ($75+K). In addition, the audience includes households with kids and skews more male. Nearly three-quarters (73%) of those that regularly stream video say that they have watched ad-supported OTT. Moreover, 45 percent of streamers report that they watch ad-supported OTT the most.

“IAB research is dedicated to helping brands optimize their spend on digital media—and the findings of this report underscore that commitment.”

ASV OTT viewers are not easily reached through TV or subscription-based video on demand (SVOD). More than half (52%) of ASV OTT viewers are cord-cutters or cord-shavers, largely due to cost (77%), while 42 percent of ASV viewers cite ‘convenience/flexibility’ and 38 percent cite ‘better content on streaming services’ as a reason. Additionally, they spend less time watching cable than SVOD viewers. ASV OTT viewers report watching more video OTT than they did a year ago.

Important for brands is that ad receptiveness is stronger for ASV OTT viewers than those who watch SVOD or TV-only. A higher percentage of the ASV OTT segment also enjoy interacting with ads in comparison to SVOD viewers, providing opportunities to engage and develop one-to one-relationships with these households and consumers.

The study also found that ASV OTT viewers are more likely to try new brands, with 36 percent stating they learn about new brands/products/services from video ads. In fact, ASV OTT viewers report spending more on online subscription purchases ($119 per month vs. $89/mo for SVOD viewers)—from meal kits to contact lenses—making them an ideal target for direct-to-consumer marketers.

In addition, ASV OTT fans are more likely to follow social influencers than SVOD and TV-only viewers, pointing to an important part of the media mix that marketers should pay attention to if they want to reach this audience.

“Advertisers have a real opportunity to make connections with younger consumers, who are likely to have higher-income, through ad-supported video delivered over-the-top,” said Anna Bager, Executive Vice President, Industry Initiatives, IAB. “The findings from this study can help marketers navigate their way to valuable and receptive audiences by deploying an OTT strategy.”

“This study showcases the high value that brands should place with increased investment in ad-supported OTT,” said Sue Hogan, Senior Vice President, Research and Measurement, IAB. “IAB research is dedicated to helping brands optimize their spend on digital media—and the findings of this report underscore that commitment.”

Two online surveys were fielded among MARU/Matchbox’s Springboard America online panel (~250,000 U.S. members). 1.) Omnibus among 1,500 nationally representative U.S. sample to determine the profile of the Ad-Supported OTT Video Viewer; fielded August 10, 2018. 2.) A study among 1,223 consumers ages 18+ in the U.S., with age/gender quotas set to reflect viewership profiles from the omnibus study; fielded September 25 – 26, 2018.

About the Digital Content NewFronts

The Digital Content NewFronts is an annual series of events founded by AOL, Digitas, Google/YouTube, Hulu, Microsoft, and Yahoo in 2012. It is committed to the creation of valuable partnerships between brands and native digital content. Our mission is to shape the NewFronts into a new and practical marketplace for connecting the wealth of digital content and content creators to brands and their media and marketing agencies.

About IAB

The Interactive Advertising Bureau (IAB) empowers the media and marketing industries to thrive in the digital economy. Its membership is comprised of more than 650 leading media and technology companies that are responsible for selling, delivering, and optimizing digital advertising or marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, it develops technical standards and best practices. IAB and the IAB Education Foundation are committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., IAB advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. Founded in 1996, the IAB is headquartered in New York City and has a San Francisco office.

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